Novo Holdings
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Natalie Portman and John Legend are joining a group of venture capitalists and unnamed fashion brands backing MycoWorks, a company that just raised $45 million to commercialize its technology that makes a fungal-based biomaterial that can replace leather.
The goal is to get consumers to trade in their leather and lizard skin couture for some fungus fashion.
The company said it has inked some deals with big fashion brands as partners as it looks to bring its funky fungus to the masses in shoes, wallets, belts and other goods that traditionally use cowhide or other animal skins.
“We have been working with a few luxury brands and a major footwear manufacturer in very close collaboration,” said Matt Scullin, the chief executive officer at MycoWorks .
The unnamed fashion brands have already started producing products for stores in a range of items including shoes, ready to wear apparel and bags, according to Scullin.
MycoWorks likes to differentiate itself from other brands that want to bring a fungus among us or plant new plant-based fabrics in fashion — companies like Bolt Threads (mushrooms), Ananas Anam (pineapple fibers), and Desserto (cactus leather) — with its emphasis on the durability of its fabric.
“We’ve had the product tested in a huge range of different applications of various leather-based apparel to upholstery to standard leather goods like handbags and wallets. The key difference between our material and mushroom leather is that the structural components is so high,” Scullin said. “We’re confident in the material’s ability to perform in a really wide range of applications so there’s a wide range of uses for that.”
To that end, MycoWorks is focused on the high-end of the market. “There’s a misconception that brands are willing to sacrifice performance for sustainability and that’s not true,” Scullin said. “The real adoption occurs in an industry like this when the performance is there.”
Scullin won’t say how much the MycoWorks material costs nor would he talk about which specific companies are working with the company’s product right now. He did say that the company hopes eventually to be price competitive with not just the traditional leather market, but the plastic market for leather replacements, which is worth $70 billion per-year alone.
With the company’s current capacity it can produce tens of thousands of square feet of fungal material per yar, according to Scullin. That means MycoWorks still has a long way to go to catch up to an industry that produces billions of square feet of leather.
The funding for MycoWorks is impressive, but it also has to contend with some competitors that are getting traction of their own in the fashion industry.
In October, Bolt Threads announced the creation of a consortium alongside longtime partners Adidas, Stella McCartney and the fashion house behind brands like Balenciaga to explore mushroom leather-based products.
For MycoWorks investors — including WTT Investment Ltd. (Taipei, Taiwan), DCVC Bio, Valor Equity Partners, Humboldt Fund, Gruss & Co., Novo Holdings, 8VC, SOSV, AgFunder, Wireframe Ventures and Tony Faddell — the competition is expected. But they believe that MycoWorks functionality makes it the king (oyster) of the leather substitute world.
“Fine mycelial leather is customizable to client needs,” said DCVC Bio investor Kiersten Stead. “[It’s] customizable in terms of shape, and application. And prices will vary depending on what the application and the criteria from customers is.”
In all, MycoWorks has raised $62 million and the company’s new financing announcement coincides with the opening of a new Emeryville, California production plant that takes its capacity up to its current tens-of-thousands of feet of fungal leather replacement capacity.
Behind all of this push to find replacements for animal skins is a growing awareness of the problems associated with traditional methods for manufacturing leather for clothes and shoes. It’s a terribly toxic and polluting process, both in the tanning and dyeing and in the waste and landfilling associated with both animal leather and its plastic replacements.
“The process of growing the mycelium is carbon negative. Customers will look at [our product] versus an animal hide and say why wouldn’t I choose [that],” said Sculin. “In addition you have the non-animal aspects and the plastic-free aspects that are driving so many decisions right now… what we really are to our brand partners is an advanced manufacturing company. We are motivated by sustainability. We represent a way for them to change their supply chains.”
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For nearly 15 years LanzaTech has been developing a carbon capture technology that can turn waste streams into ethanol that can be used for chemicals and fuel.
Now, with $72 million in fresh funding at a nearly $1 billion valuation and a newly inked partnership with biotechnology giant Novo Holdings, the company is looking to expand its suite of products beyond ethanol manufacturing, thanks, in part, to the intellectual property held by Novozymes (a Novo Holdings subsidiary).
“We are learning how to modify our organisms so they can make things other than ethanol directly,” said LanzaTech chief executive officer Jennifer Holmgren.
From its headquarters in Skokie, Ill., where LanzaTech relocated in 2014 from New Zealand, the biotechnology company has been plotting ways to reduce carbon emissions and create a more circular manufacturing system. That’s one where waste gases and solid waste sources that were previously considered to be un-recyclable are converted into chemicals by LanzaTech’s genetically modified microbes.
The company already has a commercial manufacturing facility in China, attached to a steel plant operated by the Shougang Group, which produces 16 million gallons of ethanol per year. LanzaTech’s technology pipes the waste gas into a fermenter, which is filled with genetically modified yeast that uses the carbon dioxide to produce ethanol. Another plant, using a similar technology, is under construction in Europe.
Through a partnership with Indian Oil, LanzaTech is working on a third waste gas converted to ethanol using a different waste gas taken from a Hydrogen plant.
The company has also inked early deals with airlines like Virgin in the U.K. and ANA in Japan to make an ethanol-based jet fuel for commercial flight. And a third application of the technology is being explored in Japan which takes previously un-recyclable waste streams from consumer products and converts that into ethanol and polyethylene that can be used to make bio-plastics or bio-based nylon fabrics.
Through the partnership with Novo Holdings, LanzaTech will be able to use the company’s technology to expand its work into other chemicals, according to Holmgren. “We are making product to sell into that [chemicals market] right now. We are taking ethanol and making products out of it. Taking ethylene and we will make polyethylene and we will make PET to substitute for fiber.”
Holmgren said that LanzaTech’s operations were currently reducing carbon dioxide emissions by the equivalent of taking 70,000 cars off the road.
“LanzaTech is addressing our collective need for sustainable fuels and materials, enabling industrial players to be part of building a truly circular economy,” said Anders Bendsen Spohr, senior director at Novo Holdings, in a statement. “Novo Holdings’ investment underlines our commitment to supporting the bio-industrials sector and, in particular, companies that are developing cutting-edge technology platforms. We are excited to work with the LanzaTech team and look forward to supporting the company in its next phase of growth.”
Holmgren said that the push into new chemicals by LanzaTech is symbolic of a resurgence of industrial biotechnology as one of the critical pathways to reducing carbon emissions and setting industry on a more sustainable production pathway.
“Industrial biotechnology can unlock the utility of a lot of waste carbon emissions,” said Holmgren. “[Municipal solid waste] is an urban oil field. And we are working to find new sources of sustainable carbon.”
LanzaTech isn’t alone in its quest to create sustainable pathways for chemical manufacturing. Solugen, an upstart biotechnology company out of Houston, is looking to commercialize the bio-production of hydrogen peroxide. It’s another chemical that’s at the heart of modern industrial processes — and is incredibly hazardous to make using traditional methods.
As the world warms, and carbon emissions continue to rise, it’s important that both companies find pathways to commercial success, according to Holmgren.
“It’s going to get much, much worse if we don’t do anything,” she said.
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